What I’m Watching This Week – 13 September 2021

The Markets (as of market close September 10, 2021)

Stocks retreated last week, with each of the benchmark indexes listed here falling at least 1.3%. The Russell 2000 and the Dow dropped the furthest, declining 2.8% and 2.2%, respectively. Investors contended with mixed signals. A better-than-expected jobless claims report, while encouraging, could prompt the Federal Reserve to start reducing its asset purchases sooner. Also, the spread of the Delta variant may impede economic recovery. Each of the market sectors fell for the week, with real estate dropping nearly 4.0%. Crude oil prices and the dollar inched ahead last week, while gold prices, which had been climbing, fell 2.2%. Ten-year Treasury yields climbed marginally higher.

Stocks opened the Labor Day week mostly down. Last Tuesday saw only the Nasdaq eke out a 0.1% gain, while the remaining benchmark indexes listed here lost value. The Dow and the Russell 2000 fell by nearly 8.0%, with the S&P 500 and the Global Dow dropping nearly 0.4%. The yield on 10-year Treasuries rose, crude oil prices dipped, and the dollar advanced. Several of the market sectors lost ground, with only communication services, consumer discretionary, and information technology advancing.

Wall Street ended lower last Wednesday, reflecting fears that the Delta variant could stymie the economy’s recovery and uncertainty over when the Federal Reserve might begin to pull back its accommodative bond purchasing. Each of the benchmark indexes listed here lost ground, with the Russell 2000 dipping 1.2%, followed by the Global Dow and the Nasdaq, which fell 0.6%. Crude oil prices and the dollar rose, while 10-year Treasury yields declined. Consumer staples, real estate, utilities, and industrials were the only market sectors to advance. Energy and materials decreased more than 1.0%.

Stocks trended lower last Thursday, despite jobless claims hitting an 18-month low. The S&P 500 fell for the fourth consecutive session after dipping 0.5%. The Dow and the Global Dow dropped 0.4%, the Nasdaq declined 0.3%, and the Russell 2000 slipped less than 0.1%. Ten-year Treasury yields fell 2.6%, crude oil prices declined 2.0%, and the dollar was mixed. Energy, financials, and materials were the only market sectors to advance, while real estate (-2.1%) and health care (-1.2%) fell the furthest.

Last week ended with stocks closing lower. The Russell 2000 dropped 1.0%, followed by the Nasdaq (-0.9%), the Dow and the S&P 500 (-0.8%), and the Global Dow (-0.3%). Treasury yields, crude oil prices, and the dollar increased. Each of the market sectors lost ground, with real estate, utilities, and information technology falling at least 1.0%.

The national average retail price for regular gasoline was $3.176 per gallon on September 6, $0.037 per gallon more than the prior week’s price and $0.965 higher than a year ago. Gasoline production increased during the week ended September 3, averaging 10.1 million barrels per day. U.S. crude oil refinery inputs averaged 14.3 million barrels per day during the week ended September 3 — 1.6 million barrels per day less than the previous week’s average. Refineries operated at 81.9% of their operable capacity, down from the prior week’s level of 91.3%.

Stock Market Indexes

Market/Index2020 ClosePrior WeekAs of 9/10Weekly ChangeYTD Change
DJIA30,606.4835,369.0934,607.72-2.15%13.07%
Nasdaq12,888.2815,363.5215,115.49-1.61%17.28%
S&P 5003,756.074,535.434,458.58-1.69%18.70%
Russell 20001,974.862,292.052,227.55-2.81%12.80%
Global Dow3,487.524,082.924,030.32-1.29%15.56%
Fed. Funds target rate0.00%-0.25%0.00%-0.25%0.00%-0.25%0 bps0 bps
10-year Treasuries0.91%1.32%1.34%2 bps43 bps
US Dollar-DXY89.8492.1492.640.54%3.12%
Crude Oil-CL=F$48.52$69.26$69.620.52%43.49%
Gold-GC=F$1,893.10$1,830.20$1,789.40-2.23%-5.48%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

  • The job market is wide open, based on the latest data from the Job Openings and Labor Turnover summary. The number of job openings increased to an all-time high of 10.9 million (+749,000) on the last business day of July. The rate of job openings increased to 6.9%. Job openings increased in several industries, with the largest increases in health care and social assistance (+294,000), finance and insurance (+116,000), and accommodation and food services (+115,000). There were 4.0 million workers who voluntarily quit, while the numbers of layoffs and discharges were 1.5 million and 1.0 million, respectively. Over the 12 months ended in July, hires totaled 72.6 million and separations (includes quits, layoffs, and discharges) totaled 65.6 million, yielding a net employment gain of 7.0 million.
  • Producer prices have risen 8.3% over the last 12 months after climbing 0.7% in August. Following a 0.3% increase last month, producer prices less foods, energy, and trade services are up 6.3% since August 2020, the largest 12-month advance since data was first calculated in 2014. Producer prices for services advanced 0.7% in August, while goods prices rose 1.0%. Half of the August increase in goods prices is attributable to a 2.9% jump in prices for foods.
  • For the week ended September 4, there were 310,000 new claims for unemployment insurance, a decrease of 35,000 from the previous week’s level, which was revised up by 5,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended August 28 was 2.0%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended August 28 was 2,783,000, a decrease of 22,000 from the prior week’s level, which was revised up by 57,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, during the same period last year, there were 881,000 initial claims for unemployment insurance, and the insured unemployment claims rate was 9.3%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended August 21 were Puerto Rico (4.8%), the District of Columbia (4.0%), New Jersey (3.6%), California (3.4%), Illinois (3.3%), New York (3.0%), Rhode Island (3.0%), Connecticut (2.9%), Hawaii (2.6%), and the Virgin Islands (2.6%). States and territories with the largest increases in initial claims for the week ended August 28 were Missouri (+7,182), Ohio (+5,563), New York (+3,776), Tennessee (+1,854), and Florida (+1,723), while states/territories with the largest decreases were California (-7,009), Illinois (-6,712), Virginia (-4,146), New Jersey (-2,496), and Oregon (-1,686).

Eye on the Week Ahead

Inflation indicators are front and center this week, with the latest release of the Consumer Price Index, the retail sales report, and import and export data. The CPI has risen 5.4% since July 2020, while retail sales have risen 15.8% over the same period. Import prices have risen 10.2% for the 12 months ended in July, while export prices are up 17.2%.

What I’m Watching This Week – 7 September 2021

The Markets (as of market close September 3, 2021)

Wall Street closed the week generally higher, with only the Dow dipping. Investors have the Labor Day weekend to weigh the effects of the somewhat lackluster jobs report for August. Last week, traders continued to move back to tech stocks and megacaps, driving the Nasdaq to record highs. Following the advancing Nasdaq was the Global Dow, the Russell 2000, and the S&P 500. Ten-year Treasury yields inched up, the dollar slipped, while crude oil prices rose less than $1.00 per barrel. Gold prices climbed for the second consecutive week. Year to date, the S&P 500 is nearly 21.0% higher than its 2020 closing mark, closely followed by the Nasdaq. Among the market sectors, energy, financials, industrials, and materials fell, while communication services, real estate, technology, consumer discretionary, health care, utilities, and consumer staples advanced.

Stocks closed last Monday mixed, with the Nasdaq (0.9%) and the S&P 500 (0.4%) reaching new highs, while the Dow (-0.2%) and the Russell 2000 (-0.5%) lagged. The Global Dow inched up 0.1%. Megacap growth stocks advanced, while value stocks and cyclicals fell. Among the sectors, real estate, information technology, consumer discretionary, and communication services performed well, while financials and energy declined. Ten-year Treasury yields dipped, crude oil prices were unchanged, and the dollar rose 0.4%.

Last Tuesday, equities ended August with monthly gains. Following last month’s advance, the S&P 500 posted its strongest year-to-date increase since 1997. However, stocks opened September with mixed returns. The Dow, the S&P 500, and the Nasdaq declined 0.1%; the Russell 2000 advanced 0.3%; and the Global Dow ticked up 0.2%. Treasury yields rose, the dollar was mixed, and crude oil prices fell.

Stocks closed mostly higher last Wednesday, with only the Dow slipping. Megacaps helped push the Nasdaq and the S&P 500 higher. A surge in consumer staples drove the Russell 2000 up 0.6%. Real estate, utilities, and communication services advanced among the sectors, while energy and financials declined. Treasury yields, crude oil prices, and the dollar fell.

Wall Street closed higher last Thursday, with each of the benchmark indexes listed here posting gains. Energy and industrial shares helped drive the S&P 500 to another record high. Cyclical stocks outperformed tech shares. The small caps of the Russell 2000 (0.7%) led the indexes, followed by the Dow (0.4%), the Global Dow (0.3%), the S&P 500 (0.3%), and the Nasdaq (0.1%). Ten-year Treasury yields and the dollar declined for the third consecutive day. Crude oil prices rose, likely impacted somewhat by the aftermath of Hurricane Ida in the Gulf of Mexico.

A disappointing jobs report left equities mixed last Friday, although the Nasdaq managed to advance 0.2% — enough to reach a record high. Otherwise, stocks dipped lower on the day, with the Russell 2000 falling 0.5%, followed by the Dow (-0.2%) and the Global Dow (-0.1%). The S&P 500 closed essentially unchanged. Treasury yields advanced, while the dollar and crude oil prices slipped. Energy, financials, industrials, utilities, and materials fell by at least 0.5%.

The national average retail price for regular gasoline was $3.139 per gallon on August 30, $0.006 per gallon less than the prior week’s price but $0.917 higher than a year ago. Gasoline production decreased during the week ended August 27, averaging 9.9 million barrels per day. U.S. crude oil refinery inputs averaged 15.9 million barrels per day during the week ended August 27 — 133,000 barrels per day less than the previous week’s average. Refineries operated at 91.3% of their operable capacity, down from the prior week’s level of 92.4%.

Stock Market Indexes

Market/Index2020 ClosePrior WeekAs of 9/3Weekly ChangeYTD Change
DJIA30,606.4835,454.8135,369.09-0.24%15.56%
Nasdaq12,888.2815,129.5015,363.521.55%19.21%
S&P 5003,756.074,509.374,535.430.58%20.75%
Russell 20001,974.862,278.022,292.050.62%16.06%
Global Dow3,487.524,055.614,082.920.67%17.07%
Fed. Funds target rate0.00%-0.25%0.00%-0.25%0.00%-0.25%0 bps0 bps
10-year Treasuries0.91%1.31%1.32%1 bps41 bps
US Dollar-DXY89.8492.6892.14-0.58%2.56%
Crude Oil-CL=F$48.52$68.72$69.260.79%42.75%
Gold-GC=F$1,893.10$1,821.60$1,830.200.47%-3.32%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

  • There were 235,000 new jobs added in August, well below the totals from both June (962,000) and July (1.1 million). Employment has risen by 17.0 million since April 2020 but is down by 5.3 million, or 3.5%, from its pre-pandemic level in February 2020. In August, notable job gains occurred in professional and business services, transportation and warehousing, private education, manufacturing, and other services. Employment in retail trade declined over the month. The unemployment rate dipped 0.2 percentage point to 5.2% in August. The number of unemployed persons edged down 318,000 to 8.4 million, following a 782,000 decrease in July. Both the unemployment rate and the number of unemployed persons are well below their April 2020 highs but remain above their levels prior to COVID-19 (3.5% and 5.7 million, respectively). The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 246,000 in August to 3.2 million but is 2.1 million higher than in February 2020. These long-term unemployed accounted for 37.4% of the total unemployed in August. The labor force participation rate, at 61.7% in August, was unchanged from July. The employment-population ratio, at 58.5%, was 0.1 percentage point above July’s total. This measure is up from its low of 51.3% in April 2020 but remains below the figure of 61.1% in February 2020. The number of persons not in the labor force who currently want a job declined by 835,000 in August to 5.7 million. In August, the number of employed persons who teleworked because of the coronavirus pandemic, at 13.4%, was little changed from the prior month. In August, 5.6 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic, up from 5.2 million in July. Average hourly earnings rose for the fifth consecutive month after increasing by $0.17 to $30.73 in August. Average hourly earnings have risen 4.3% since August 2020. In August, the average work week for all employees was 34.7 hours for the third consecutive month.
  • Manufacturing improved in August, but at a slightly slower pace than in July, according to the latest IHS Markit U.S. Manufacturing Purchasing Managers’ Index™ (PMI™). The purchasing managers’ index for August was 61.1, down from 63.4 the previous month. The August growth in manufacturing was supported by increases in production and new orders, which were hampered by capacity constraints and material shortages. In addition, cost burdens rose substantially in August, with the rate of price inflation the fastest in more than 14 years.
  • Activity in the services sector slowed in August, according to the IHS Markit US Services PMI. Services increased at the slowest rate in eight months as waning demand, both domestically and abroad, led to the softest rise in new business since August 2020. Jobs growth was the slowest in 14 months. Meanwhile, input costs and output charges quickened slightly as hikes in supplier and wage bills were partly passed on to clients.
  • The goods and services trade deficit was $70.1 billion in July, down $3.2 billion, or 4.3%, from the June figure. July exports were $212.8 billion, $2.8 billion, or 1.3%, more than June exports. July imports were $282.9 billion, $0.4 billion, or -0.2%, less than June imports. Year to date, the goods and services deficit increased $131.0 billion, or 37.1%, from the same period in 2020. Exports increased $205.0 billion, or 16.8%. Imports increased $336.0 billion, or 21.3%.
  • For the week ended August 28, there were 340,000 new claims for unemployment insurance, a decrease of 14,000 from the previous week’s level, which was revised up by 1,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended August 21 was 2.0%, a 0.1 percentage point decrease from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended August 21 was 2,748,000, a decrease of 160,000 from the prior week’s level, which was revised up by 46,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, during the same period last year, there were 875,000 initial claims for unemployment insurance, and the insured unemployment claims rate was 9.1%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended August 14 were Puerto Rico (4.8%), California (4.0%), the District of Columbia (3.6%), New Jersey (3.5%), Illinois (3.4%), Rhode Island (3.1%), Connecticut (3.0%), New York (3.0%), the Virgin Islands (2.7%), and Nevada (2.6%). States and territories with the largest increases in initial claims for the week ended August 21 were Illinois (+3,832), Florida (+2,545), Maryland (+1,723), Oregon (+1,377), and New Jersey (+837), while states and territories with the largest decreases were Michigan (-6,757), Virginia (-4,670), Texas (-3,040), Ohio (-1,515), and Georgia (-1,407).

Eye on the Week Ahead

This week includes a couple of potentially market-moving economic reports. The Job Openings and Labor Turnover Survey (JOLTS) report for July is available this week. The number of job openings increased to a series high of 10.1 million in June, with the largest increases in job openings occurring in professional and business services (227,000), retail trade (133,000), and accommodation and food services (121,000). The Producer Price Index for August is also out this week. Prices at the producer level have been rising steadily over the past several months and have risen 7.8% for the 12 months ended in July.

Monthly Market Review – August 2021

The Markets (as of market close August 31, 2021)

The benchmark indexes enjoyed a solid August, with the S&P 500 and the Nasdaq reaching record highs multiple times during the month. In fact, the S&P 500 recorded its seventh straight monthly advance — its longest streak of monthly gains since January 2018. Each of the benchmarks is well ahead of its 2020 year-end value, led by the S&P 500, followed by the Nasdaq, the Global Dow, the Dow, and the Russell 2000. Ten-year Treasury yields increased and crude oil prices fell, while the dollar and gold prices inched higher.

Stocks climbed higher in August, despite a drop in consumer confidence amid the spread of the Delta variant and the possibility of travel restrictions. Growth and technology shares outperformed cyclicals. Each of the market sectors gained, with only the energy sector sliding lower. Financials and communication services advanced the most.

Federal Reserve Chair Jerome Powell may have done enough to help calm investors’ concerns by promoting the idea that interest rates will remain at their current level for some time, although a reduction in the bond-buying stimulus program may begin before the end of the year. Inflationary pressures continued to rise as prices at the consumer and producer levels increased in July.

Second-quarter GDP showed the economy expanded by nearly 7.0%. Sales of existing and new homes advanced, as prices for new single-family homes rose, while prices for existing homes slid. Industrial production increased. Close to 1.0 million new jobs were added in both June and July, while the unemployment rate and the number of unemployment claims fell.

Stock Market Indexes

Market/Index2020 ClosePrior MonthAs of August 31Monthly ChangeYTD Change
DJIA30,606.4834,935.4735,360.731.22%15.53%
Nasdaq12,888.2814,672.6815,259.244.00%18.40%
S&P 5003,756.074,395.264,522.682.90%20.41%
Russell 20001,974.862,226.252,273.772.13%15.14%
Global Dow3,487.523,981.324,063.772.07%16.52%
Fed. Funds target rate0.00%-0.25%0.00%-0.25%0.00%-0.25%0 bps0 bps
10-year Treasuries0.91%1.23%1.30%7 bps39 bps
US Dollar-DXY89.8492.1492.670.58%3.15%
Crude Oil-CL=F$48.52$73.81$68.51-7.18%41.20%
Gold-GC=F$1,893.10$1,816.701,817.500.04%-3.99%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Latest Economic Reports

  • Employment: There were 943,000 new jobs added in July, keeping up with the pace of June’s upwardly revised estimate of 938,000 new jobs. Employment in July is up by 16.7 million since April 2020 but is down by 5.7 million, or 3.7%, from its pre-pandemic level in February 2020. Notable job growth in July occurred in leisure and hospitality (+380,000), with over half of the job gain coming from food services and drinking places (+253,000). Job gains also occurred in local government education (+221,000) and private education (+40,000), professional and business services (+60,000), and transportation and warehousing (+50,000). In July, the unemployment rate declined 0.5 percentage point to 5.4%, with the number of unemployed persons falling by 782,000 to 8.7 million. These measures are down considerably from their recent highs in April 2020 but remain well above their levels prior to the pandemic (3.5% and 5.7 million, respectively, in February 2020). Among the unemployed, the number of persons on temporary layoff dropped by 572,000 to 1.2 million. This measure is down considerably from the recent high of 18.0 million in April 2020 but is 489,000 above the February 2020 level. In July, the number of persons not in the labor force who currently want a job was 6.5 million, little changed over the month but up by 1.5 million since February 2020. In July, the number of employed persons who teleworked because of the pandemic fell to 13.2%, down from 14.4% in the prior month. In July, 5.2 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic. This measure is down from 6.2 million in June. The labor force participation rate ticked up 0.1 percentage point to 61.7% in July, and the employment-population ratio increased by 0.4 percentage point to 58.4%. Average hourly earnings increased by $0.11 to $30.54 in July after increasing $0.10 in June. Average hourly earnings are up 4.0% from July 2020. The average work week was unchanged at 34.8 hours in July.
  • The number of claims for unemployment insurance continued to fall. According to the latest weekly totals, as of August 14 there were 2,862,000 workers receiving unemployment insurance benefits, down from the July 17 total of 3,269,000. The unemployment rate for the week ended August 14 was 2.1%, down 0.3 percentage point from the July 17 rate of 2.4%. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. During the week ended August 7, Extended Benefits were available in 10 states/territories: Alaska, California, Connecticut, the District of Columbia, Illinois, Nevada, New Jersey, New Mexico, New York, and Texas; 46 states reported 5,004,753 continued weekly claims for Pandemic Unemployment Assistance benefits (5,246,162 in July), and 47 states reported 3,793,956 continued claims for Pandemic Emergency Unemployment Compensation benefits (4,233,883 in July).
  • FOMC/interest rates: The Federal Open Market Committee did not meet in August. However, at the Jackson Hole Economic Policy Symposium, Federal Reserve Chair Jerome Powell reiterated that the current spike in inflation is largely the result of transitory factors and that the FOMC will continue to hold the current target range for the federal funds rate at its current level. Powell also noted that an eventual reduction of monthly asset purchases is likely to begin some time before the end of 2021.
  • GDP/budget: According to the second estimate, the economy accelerated at an annual rate of 6.6% in the second quarter of 2021 after advancing 6.3% in the first quarter of 2021. Consumer spending, as measured by personal consumption expenditures, increased 11.9% in the second quarter after rising 11.4% in the prior quarter. The personal consumption price index (prices for consumer goods and services) rose 6.5% in the second quarter after climbing 3.8% in the first quarter. Excluding food and energy, the price index increased 6.1%. In the second quarter, fixed investment climbed 3.4% following a 13.0% increase in the first quarter; residential fixed investment fell 11.5% after increasing 13.3% in the first quarter. Exports rose 6.6% in the second quarter after decreasing 2.9% in the first quarter, and imports (which are a negative in the calculation of GDP) increased 6.7% in the second quarter (9.3% in the first quarter).
  • The Treasury budget deficit was $302.1 billion in July, following the June deficit of $174.2 billion. The deficit is 380% larger than the deficit in July 2020. Following the latest increase, the budget deficit through the first 10 months of the current fiscal year widened to $2.54 trillion, 10.0% lower than last year’s deficit over the same period. Compared to last fiscal year, government expenditures have increased 4.0%, while receipts have increased 18.0%.
  • Inflation/consumer spending: Prices at the consumer level continued to advance in July. According to the latest Personal Income and Outlays report, consumer prices rose 0.4% in July after edging up 0.5% in June. Prices have increased 4.2% since July 2020. Excluding food and energy, consumer prices rose 0.3% in July (0.4% in June) and 3.6% since July 2020. Both personal income and disposable (after-tax) personal income increased 1.1% in July. Consumer spending rose 0.3% in July following a 1.1% jump in June.
  • The Consumer Price Index climbed 0.5% in July, the same increase as in June. Over the 12 months ended in July, the CPI rose 5.4%. Food prices increased 0.7% and new vehicle prices rose 1.7%. Energy prices rose 1.6%, with gasoline prices climbing 2.4%. Core prices, excluding food and energy, climbed 0.3% in July and have advanced 4.3% since July 2020. Over the last 12 months, energy prices have risen 23.8%, food prices have increased 3.4%, and prices for used cars and trucks have climbed 41.7%.
  • Prices that producers receive for goods and services continued to climb in July, increasing 1.0% for the second consecutive month. Producer prices increased 7.8% for the 12 months ended in July, the largest yearly gain since November 2010 when 12-month data was first calculated. In July, prices for services rose 1.1% and prices for goods moved up 0.6%. Producer prices less foods, energy, and trade services advanced 0.9% in July and have risen 6.1% since July 2020, the largest 12-month increase since August 2014.
  • Housing: Existing home prices advanced for the second consecutive month after climbing 2.0% in July. Over the past 12 months, existing home sales increased 1.5%. The median existing-home price was $359,900 in July ($363,300 in June), up 17.8% from July 2020. Total housing inventory at the end of July rose 7.3% from June’s supply but is down 12.0% from one year ago. Unsold inventory sits at a 2.6-month supply at the present sales pace, up slightly from the 2.5-month figure recorded in June but down from 3.1 months in July 2020. Sales of existing single-family homes rose 2.7% in July following a 1.4% advance in June. Year over year, sales of existing single-family homes fell 0.8%. The median existing single-family home price was $367,000 in July, down from $370,600 in June.
  • New single-family home sales increased for the first time in four consecutive months after advancing 1.0% in July. Sales of new single-family homes have decreased 27.2% from July 2020. The median sales price of new single-family houses sold in July was $390,500 ($361,800 in June). The July average sales price was $446,000 ($428,700 in June). The inventory of new single-family homes for sale in July represents a supply of 6.2 months at the current sales pace, up slightly from the June estimate of 6.0 months.
  • Manufacturing: Industrial production increased 0.9% in July after advancing 0.2% the previous month. Manufacturing output rose 1.4% after edging down 0.1% in June. About half of the gain in factory output was attributable to a jump of 11.2% for motor vehicles and parts, as a number of vehicle manufacturers trimmed or canceled their typical July shutdowns. In July, mining increased 1.2% (0.5% in June), while utilities slipped 2.1% after advancing 3.1% in June. Total industrial production in July was 6.6% higher than its year-earlier level, but it was 0.2% below its pre-pandemic (February 2020) level.
  • New orders for durable goods decreased 0.1% in July after falling 0.8% in June. Transportation drove July’s decrease, with new orders down 2.2% after advancing 1.4% in June. Excluding transportation, new orders increased 0.7%. Excluding defense, new orders fell 1.2%. New orders for nondefense capital goods declined 8.0% following a 1.6% increase in June. New orders for defense capital goods increased 20.5% in July after decreasing 1.4% in June.
  • Imports and exports:Inflationary pressures at the import level slowed in July. Import prices rose 0.3% following a 1.1% advance in June. Import prices rose 10.2% over the 12 months ended in July (11.2% for the 12 months ended in June). The monthly advance in import prices was the lowest since November 2020. Import fuel prices increased 2.9% in July following a 5.5% jump in June. Import fuel prices advanced 66.5% for the year ended in July (85.1% for the year ended in June). Nonfuel import prices were unchanged in July following a 0.7% advance in June. Export prices increased 1.3% in July after climbing 1.2% in June. For the year ended in July, the price index for exports rose 17.2%. Agricultural export prices fell 1.7% in July following a 1.5% advance in June. Nonagricultural exports rose 1.6% in July after increasing 1.1% in June.
  • The international trade in goods deficit was $86.4 billion in July, down $5.7 billion, or 6.2%, from June. In July, exports increased $2.2 billion, or 1.5%, while imports fell $3.4 billion, or 1.4%. For the 12 months ended in July, exports have risen 27.6%, while imports have increased 19.6%.
  • The latest information on international trade in goods and services, out August 5, is for June and shows that the goods and services trade deficit increased by 6.7% to $75.7 billion. June exports rose 0.6%, while imports increased 2.1%. At $284.0 billion, imports of goods and services were the highest on record. Year over year, the goods and services deficit increased $135.8 billion, or 46.4%, from June 2020. Exports increased $150.9 billion, or 14.3%. Imports increased $286.7 billion, or 21.3%.
  • International markets: Inflationary pressures may be slowing at home and around the world. China’s Consumer Price Index rose 0.3% in July and is up only 1.0% year over year. Prices were flat in the United Kingdom in July and have increased 2.0% since July 2020. However, prices in the Eurozone picked up in August, climbing 0.4% for the month and 3.0% over the past 12 months. Overall economic growth is trending upward as well. Second-quarter GDP for the Eurozone rose 2.0% and is up 13.6% year over year. The United Kingdom’s GDP advanced 4.8% in the second quarter and 22.2% for the year. China’s economy continues to rebound, as its GDP rose 7.9% in the second quarter from a year ago. For August, the STOXX Europe 600 Index gained about 1.2%; the United Kingdom’s FTSE inched up 0.3%; Japan’s Nikkei 225 Index rose 1.1%; and China’s Shanghai Composite Index increased nearly 2.3%.
  • Consumer confidence: According to the latest report from The Conference Board, consumer confidence declined in August for the second consecutive month. The Consumer Confidence Index® stands at 113.8, down marginally from 125.1 in July. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell to 147.3 in August from 157.2 in July. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, registered 91.4 in August, down from 103.8 in July. According to the report, concerns about the Delta variant, coupled with rising gas and food prices, resulted in a less favorable view of current economic conditions.

Eye on the Month Ahead September could see the economy and the stock market slow down a tad. The number of coronavirus cases continues to rise prompting several foreign countries to consider re-instituting travel restrictions. In addition, the Federal Reserve has indicated that it is likely to begin tapering the bond purchase program in 2021, which could make investors a bit skittish in anticipation of such a move